The MinnPost Model: Is it sustainable?

Joel Kramer wants your money for his grand journalism experiment

In summer 2007, when it was announced that a localized nonprofit online newspaper, MinnPost.com, was set for launch, the ink-stained community went abuzz. For an industry wracked by massive layoffs and plummeting ad revenue, any news not involving job loss was a good thing. Industry observers such as the Poynter Institute heralded the project as a best-of-both-worlds hybrid of new media and old, a potential example of how the Fourth Estate could survive and thrive in the 21st century.

But beneath this optimism lingered an obvious question: Could this business model—one dependent almost entirely on the goodwill of foundations and the charity of its readers—be sustainable? How to translate web traffic into enough cash flow to ensure financial independence? No one, not even MinnPost founder Joel Kramer, knew the answer.

Sixteen months later, and deep into a nationwide recession, the question is even more apt. There are reasons for both hope and trepidation. Last week, MinnPost announced that for the first time it had garnered one million pageviews in the last 31 days—triple what it had achieved just 12 months earlier. But along with this hope came grimmer news: The site revised downward its initial projections and now doesn't expect to break even until 2012—more than a year behind schedule.

Corey Anderson

"I'd say the most dramatic thing we learned was that having regular writers writing very frequently has a huge impact on traffic," says MinnPost founder Joel Kramer. "Having interesting, lively content with a lot of frequency by the same writers, that's really what's made the most difference."

"One of our biggest strategic goals is to break even absent the support of foundations," says Kramer, who raised $1.1 million in start-up funds from a combination of investors and a $250,000 grant from the Miami-based James L. Knight Foundation. "Long-term, we would like to wean ourselves off needing foundation money and become a sustainable nonprofit on the basis of revenue from our sponsorship, advertising, and membership."

Like pretty much every other media outlet in the Twin Cities (including City Pages), MinnPost has had to implement its share of budget cuts to compensate for the sour economy. The fledgling site slashed its news spending in the middle of last year and again more recently, trimming about 11 percent of this year's $1.35 million budget. The vast majority of these reductions came out of the freelance budget.

"When we launched we had no full-time staff or contract writers," says Kramer. "It was 100 percent freelance by-the-piece. Now the substantial majority of the site is written either by staff writers or contract writers."

A more noticeable change has been the average length of posts. MinnPost editors quickly discovered the depressing reality of the online news consumer—infinite choice breeds vanishingly small attention spans. As 2008 progressed, the number of 2,000-word deep-delvers shrank in proportion to more pithy posts. To an extent, the stories' length shrunk inversely to MinnPost's web traffic.

"I'd say the most dramatic thing we learned was that having regular writers writing very frequently has a huge impact on traffic," says Kramer. "Having interesting, lively content with a lot of frequency by the same writers, that's really what's made the most difference."

MinnPost's short-term objective: transform that increased web traffic into ad revenue, which is no small challenge. Less than two months ago, MinnPost began geotargeting its ads, meaning IP addresses are used to sort whether the visitor sees local or national ads. In MinnPost's case, Kramer estimates about 30 percent of the traffic comes from outside the Twin Cities.

This year, Kramer hopes to pull in a quarter of his budget—about $300,000—from advertising. "We've been averaging more than $16 per 1,000 impressions, and I believe that is quite high in the market," Kramer says.

Another 37.5 percent of the budget, or $450,000, MinnPost hopes will come from memberships and the annual MinnRoast fundraising event. Much like public radio, MinnPost relies heavily on individual donors. The unstated—and sometimes stated—pitch being that, with a public-service outfit, a certain level of civic duty to chip in attaches itself to its users. (MinnPost doesn't have a program that "locks in" members à la the Current's "sustaining member drive," but Kramer says such a model is being considered). As of now, about 1,250 donors have coughed up pledges, the most common denominations being $50 and $100. Five separate donors have kicked in as much as 20 grand. Contributing members have been a more robust revenue stream than ads, which makes tracking them down an important priority.

"One of the things I often do when I get positive feedback is check whether they are members," says Kramer. "If they're not, I write them a nice email and say, 'No praise goes unpunished, and I appreciate your praise, and I hope you give us money.' So a big part of the membership side is getting more of the people who appreciate MinnPost to donate money. It's the same problem public radio has: Lots of people love it; some give money. That's a big issue. And also, obviously, getting more wealthy people to give big money. Having more $20,000 donors would help a lot, too."

Even if MinnPost manages to weather this brutal economy to become a viable long-term news platform, Kramer admits this model may not work everywhere.

"I don't believe there is one silver bullet for dealing with the problems with the media," says Kramer. "The problems are really serious and they affect everybody, obviously. They affect you regardless of what business model you're following. My goal here is to have ours be a solution that works. But I'm guessing there will be lots of different models, lots of different players."